DTC - Datatec Limited - Unaudited results for the
25 October 2007 8:00
DTC
 DTC                                                                             
DTC - Datatec Limited - Unaudited results for the six months ended 31 August    
                        2007                                                    
DATATEC LIMITED                                                                 
(Incorporated in the Republic of South Africa)                                  
(Registration number: 1994/005004/06)                                           
ISIN: ZAE000017745                                                              
Share Code: DTC                                                                 
("Datatec")                                                                     
UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 31 AUGUST 2007                       
Financial highlights                                                            
*    Revenue up 26% (11% organic) to $1.92 billion (2006 restated: $1.52        
billion)                                                                    
*    Gross margin percentage improved to 12.9% (2006: restated: 12.6%)          
*    Underlying* EBITDA increased by 26% to $61.0 million (2006: $48.4 million) 
*    Underlying* earnings per share up 35% to 18.9 US cents (2006: 14.0 US      
cents)                                                                      
*    Headline earnings per share up 8% to 16.8 US cents (2006: 15.6 US cents)   
Operational highlights                                                          
*    Robust growth outside the US: 57% of Group revenue now derived from outside
the US                                                                      
*    Major acquisitions transform Westcon`s European business and improve the   
    vendor mix                                                                  
*    Logicalis US restructured to improve profitability                         
Jens Montanana, Chief Executive of Datatec, commented:                          
"We have made good progress with our strategy to deliver long term, sustainable 
above average returns to shareholders by focusing on a combination of organic   
growth in the faster growing sectors of the ICT market, geographical expansion  
and through earnings enhancing acquisitions.                                    
"As planned we completed a number of important acquisitions during the first    
half.  These have not only significantly strengthened our competitive position  
in Europe but have also enhanced our product mix, operational leverage and      
geographical presence around the world."                                        
* excluding goodwill impairment, amortisation of intangible fixed assets, profit
or loss on sale of assets and businesses and unrealised foreign exchange        
movements on inter-company loans.                                               
1    PROFILE AND GROUP STRUCTURE                                                
Datatec Group ("Datatec" or the "Group", JSE and LSE: DTC) is an international  
ICT networking and related services business with operations in many of the     
world`s leading economies. The Group`s main lines of business comprise: the     
global distribution of advanced networking and communications convergence       
products ("Westcon"); ICT infrastructure solutions and network integration      
("Logicalis"); and telecommunication strategy consulting ("Analysys Mason").    
"Other Holdings" encompasses the Group`s distribution and integration businesses
in the Middle East and Africa as well as the Head Office.                       
2    STRATEGY                                                                   
The Group`s strategy is to deliver long-term, sustainable, above average returns
to shareholders through the development of its three principal operating        
divisions. These divisions are run as focused standalone businesses to          
facilitate enhanced operational and financial performance and enable them to    
react faster to technology change.                                              
The key elements of the Group`s strategy are: continued focus on the higher     
value, faster growing sectors of the ICT market such as IP communications and   
convergence technologies; targeted geographical expansion particularly in       
emerging markets and developing countries in close proximity to existing        
operations; and investment in higher margin services activities such as managed 
services and consulting and by focussing on value-enhancing acquisitions.       
The Group has successfully grown and diversified its global business so that its
non US operations accounted for 57% of Datatec`s total revenue in the first     
half.  Asia-Pacific, Africa & Middle East and South America are growing faster  
than North America and now account for 15% of the Group`s revenues. US and      
European operations are now more evenly balanced delivering 43% and 42% of the  
mix respectively.                                                               
3    OVERVIEW                                                                   
Group trading during the first half of the financial year has been in line with 
the Board`s expectations, with the exception of lower than expected             
profitability in Logicalis` US operations.  Overall organic revenue growth was  
11.4%, gross margins and profits have both improved, and underlying* earnings   
per share are up 35%.                                                           
Market conditions remain subdued in the US with as yet no apparent impact in    
demand in the rest of the world.  Europe, Asia Pacific and in particular        
emerging markets continue to produce solid and predictable growth. The weakening
US dollar has helped underpin the broad based global demand for technology      
products which are mostly priced in dollars.  Lower growth conditions in the US 
have been offset by stronger growth in the rest of the world.                   
The Group continues to benefit from its enhanced scale and sector focus of      
providing communications for ICT to service providers, integrators and          
multinational corporate and business users around the world. Although the USA   
and Europe operations continue to account for a large proportion of the Group`s 
revenues and profits, as planned, the higher growth emerging market operations  
are now contributing an ever increasing proportion of the Group`s business.     
During the period, the Group completed a number of acquisitions which have      
improved its geographical reach, vendor relationships, market position and      
product mix as well as enhanced its overall scale.  In particular, Westcon      
completed two significant earnings enhancing acquisitions in Europe, NOXS and   
Crane, and Logicalis purchased the IT division of Carotek, Inc. in the USA.     
Logicalis has also recently announced a record $150 million seven year contract 
with the Welsh Assembly Government to deliver and maintain a national broadband 
network.                                                                        
4    FINANCIAL RESULTS                                                          
Group revenue increased by 26% (11.4% organic growth) to $1.92 billion (2006    
restated: $1.52 billion), while gross margin increased from 12.6% to 12.9%.  The
2006 revenue and margin percentages have been restated for the effect of the    
change in accounting for revenue recognition of vendor maintenance contracts    
implemented in the year ended February 2007.                                    
Of the Group`s $1.92 billion revenue in the period, 43% was generated from North
America, 42% from Europe, 6% from Asia Pacific, 2% from South America and 7%    
from Middle East and Africa.                                                    
Underlying EBITDA increased by 26% to $61.0 million (2006: $48.4 million) in    
line with revenue growth.  This figure excludes unrealised foreign exchange     
losses on inter-company loans of $0.5 million (2006: $3.5 million gain). EBITDA 
increased 16% to $60.5 million (2006: $52.0 million).                           
Amortisation of intangible fixed assets arising from acquisitions rose to $4.5  
million (2006 $1.7 million) as a result of intangible assets arising on the     
acquisitions made over the past year.                                           
Underlying operating profit, before the impact of unrealised foreign exchange   
gains/losses and amortisation of intangible fixed assets increased by 29% to    
$53.5 million (2006: $41.4 million). Operating profit increased by 12% to $48.5 
million (2006: $43.3 million).                                                  
Underlying profit before tax increased by 24% to $45.5 million (2006: $36.6     
million). The net interest charge in the period was $8.0 million (2006: $4.8    
million) as a result of cash expenditure on acquisitions and higher interest    
rates. Profit before tax increased by 5% to $40.5 million (2006: $38.5 million).
The Group`s effective tax rate decreased to 30.0% from 39.0% in the equivalent  
period last year and 30.5% for the year ended 28 February 2007, primarily due to
the utilisation and recognition of previously unrecognised UK tax losses.       
Underlying* earnings per share rose 35% to 18.9 US cents (2006: 14.0 US cents). 
Basic and Headline earnings per share increased by 8% to 16.8 US cents (2006:   
15.6 cents). The Group issued 7.2 million new shares in May 2007 in connection  
with an institutional placing. The Group also issued 2.1 million shares to share
option holders and 4.5 million shares were issued for acquisitions.             
The Group`s current cash distribution policy is not to make payments at the     
interim stage of the financial year but the Board expects to make a payment to  
shareholders after the year end results.                                        
Working capital remained tightly controlled during the period with trade        
receivables increasing 19% since 28 February 2007, inventory increasing by 8%   
over the same period and trade payables increasing by 8% since 28 February 2007.
Cash generated from operations (after working capital changes) amounted to $2.7 
million (2006 cash outflow: $10.6 million). The Group spent $153 million on     
acquisitions in the first half of the financial year and paid $17 million to    
shareholders as a capital distribution in July 2007. $35 million was received   
from an institutional placing in May 2007. The Group ended the half-year period 
with net debt of $35 million, including long-term and short-term debt (28       
February 2007 net cash: $99 million).                                           
5    DIVISIONAL REVIEWS                                                         
Westcon                                                                         
Westcon accounted for 72% of the Group`s revenues and 78% of EBITDA.            
Westcon focuses on the distribution of networking, security and IP convergence  
products.  It continued to perform well, with strong revenue and EBITDA growth  
in Europe and Asia Pacific and lower growth in the US. Across all regions       
Westcon has continued to gain market share by opening up new channels for       
complex vendor solutions in higher growth SMB/SME sectors and through providing 
outsourced logistics and procurement services to a growing number of global     
service providers and large scale integrators.                                  
Westcon generated revenues of $1.39 billion, up by $256 million or 23% (2006    
restated: $1.13 billion). Of this, acquisitions accounted for $123 million of   
the growth and existing businesses $133 million. The revenue growth was         
attributable to all three regions.    As a result of the two European           
acquisitions, Europe now represents 45% of Westcon revenue compared to 40% for  
the comparable period in 2006.                                                  
The acquisitions also further balance the vendor mix, with Cisco now accounting 
for 57% of Westcon revenue compared to 61% for the comparable period in 2006.   
Westcon`s other major vendors, Nortel and Avaya constituted 11% and 10% of total
revenue respectively (2006: 13% and 9%) and there was strong growth in revenues 
from other vendors which accounted for the remaining 22% of revenue (2006: 17%).
Gross margin increased to 9.8% (2006 restated: 9.2%) contributing to a 32%      
increase in gross profit to $136.4 million (2006: $103.5 million).  The gross   
margin increase was attributable primarily to Europe and Asia Pacific.          
Operating expenses of $88.7 million (2006: $65.5 million) increased primarily   
due to higher headcount levels following the acquisitions.  EBITDA margins were 
consistent at 3.4% resulting in an increase in EBITDA to $47.7 million (2006:   
$38.0 million).  All regions saw an improvement in EBITDA.                      
Westcon completed two significant acquisitions in Europe during April and May   
respectively; NOXS Europe B.V, a leading European security distributor for      
approximately $69 million in cash, and Crane Telecommunications Group, a leading
UK-based European value added distributor of voice, data and converged          
communications solutions for approximately $67 million in cash and shares.  Net 
assets acquired with NOXS and Crane were $36 million and $25 million            
respectively and goodwill arising was $33 million and $42 million respectively. 
Westcon also acquired the assets of ReView Video LLC, a leading US distributor  
of audio, network, videoconferencing and voice over IP (VoIP) solutions, from   
ReView Video LLC for a cash consideration of $25 million in July 2007. Net      
assets acquired were $16 million and goodwill of $9 million arose on the        
acquisition.                                                                    
The acquisitions are important steps in Datatec`s strategic plans to leverage   
Westcon`s financial strength and scale of operations, including both broadening 
and strengthening its vendor relationships.  These businesses also bring new    
opportunities in convergence, security and mobility to both new and existing    
customers.  These acquisitions are being successfully integrated into Westcon   
and are performing well.                                                        
Logicalis                                                                       
Logicalis accounted for 20% of the Group`s revenues and 13% of EBITDA.          
Logicalis delivers IT services specialising in infrastructure solutions aimed at
providing corporate organisations with complete computing and IP communications 
along with data centre managed services for their enterprise wide requirements. 
The market for these solutions continues to develop strongly as companies       
embrace the benefits of broadband services and increasing online transactions.  
Within Logicalis, Europe and South America have performed strongly.  However, as
previously announced, growth in the US moderated in the first half and          
particularly during the second quarter, mainly as a result of lower than        
anticipated sales of IBM equipment.  Consequently operating costs were too high 
in proportion to expected revenues. As a result, Logicalis reported lower first 
half EBITDA compared with last year.                                            
Overall, revenue in Logicalis increased by 28% (9% organic) to $395.5 million   
(2006 restated: $308.4 million). This included $3.5 million arising from the    
acquisition of the IT division of Carotek, Inc. during the period. IBM sales    
comprised 39% of Logicalis` revenue, Cisco 26%, HP 24%, EMC 2% and other 9%.    
North America made up 50% of Logicalis` revenue, Europe 44% and South America   
6%.                                                                             
Gross margin for the year was 21.6% (2006 restated: 22.3%) with product margins 
slightly weaker, and EBITDA was $8.1 million (2006: $11.8 million) and operating
profit was $3.3 million (2006: $8.6 million).                                   
On 31 May 2007, Logicalis US acquired Carotek`s Information Technology Division,
based in Matthews, North Carolina for $7 million in cash and shares.  Net assets
of $4 million were acquired and $3 million of goodwill arose on acquisition.    
Logicalis US has absorbed five acquisitions over the last three years and       
following the slower second quarter growth, the sales infrastructure proved to  
be too high.  Management took prompt action to restructure the US operation     
which has resulted in a workforce reduction of approximately 12% with all costs 
of this action accounted for in the first half. Logicalis management is         
confident that the swift actions taken to restore the profitability in the US   
will result in an improved performance in EBITDA for the full year compared to  
the previous year.                                                              
Across the business, the Logicalis management has increased the focus on client-
specific solutions that leverage the Logicalis portfolio.  Each region has      
developed single solutions sales and consulting services units.  This is already
adding value to these solutions and further strengthening client relationships, 
with a significant number of major long term customer contracts recently        
secured.  Most notable was the awarding of a $150m seven year contract with the 
Welsh Assembly Government for the provisioning and support of a new national    
broadband network                                                               
Analysys Mason                                                                  
Analysys Mason accounted for 2% of the Group`s revenues and 5% of EBITDA.       
Analysys Mason provides strategic and technical consulting to many of the       
industry`s leading service providers, regulators and government bodies.         
Convergence in telecommunications, broadcasting, television and online media    
content is being fuelled by widespread deployment of faster broadband internet  
infrastructure.  The Group is particularly well positioned to exploit demand for
advisory and consulting services in this market around the world.               
Analysys Mason has performed well, with a modest increase in revenues and       
improved gross margins. Analysys Mason revenues increased to $31.5 million      
(2006: $30.7 million) with over half of these revenues coming from non UK       
clients.  Its revenues from developing economies, particularly Africa and the   
Middle East, now make up 32% of total revenue (2006: 20%) and the business      
continues to explore opportunities in these areas.                              
Gross margins in the division`s consulting businesses have improved year on year
and this has produced modest profit growth in this area.  However, the division 
made significant investment in its research business during the period and this 
has depressed overall profitability in the first half of the financial year.    
EBITDA amounted to $3.0 million at a margin of 9.6% (2006: $3.2 million at      
10.5%).  Operating profit was $2.7 million (2006: $3.0 million).                
Middle East & Africa                                                            
Datatec`s Middle East and Africa operations made up 6% of the Group`s revenue   
and 4% of EBITDA (excluding head office costs).                                 
African Legend Indigo is Datatec`s 55% owned South African operation formed in  
partnership with African Legend Technologies as part of South Africa`s Black    
Economic Empowerment programme on 1 September 2006. This business generated     
revenue of $27.1 million in the period (2006: $2.7 million) and, as expected,   
incurred an EBITDA loss of $0.2 million (2006: loss of $0.2 million).           
Westcon SA achieved revenues of $38.7 million (2006: $29.5 million). EBITDA was 
up 66% to $1.5 million (2006: $0.9 million).  Westcon Africa Middle East with   
operations in Africa outside South Africa achieved revenues of $18.6 million and
EBITDA of $0.3 million in its first reporting period as part of the Group.      
Online Distribution, Datatec`s leading value-added distributor for data         
networking products and services, covering the Middle East, Western Asia and    
North Africa, increased revenues by 29% to $26.7 million (2006: $20.7 million). 
EBITDA was $1.2 million (2006: $1.0 million).  Comstor Middle East, a new       
business operating in the same geographical region, achieved revenues of $4.4   
million in the period with an EBITDA loss of $0.3 million.                      
6    REPORTING                                                                  
This report has been prepared in accordance with IAS 34 and in accordance with  
the Group`s accounting policies which are consistent with the prior year and    
comply with International Financial Reporting Standards ("IFRS") of the         
International Accounting Standards Board, the JSE`s Listings Requirements, the  
AIM Rules and the Companies Act of South Africa.  It is not practical to        
establish either the revenue or profit after tax which the acquisitions referred
to in this report would have contributed to the Group if they had been included 
for the entire financial period.                                                
The report has not been audited.                                                
7    DIRECTORATE                                                                
Mr John McCartney was appointed to the Board as an independent non-executive    
director with effect from 16 July 2007.  Mr Colin Brayshaw retired from the     
Board on 6 August 2007.                                                         
8    SUBSEQUENT EVENTS                                                          
With effect from 1 September 2007, Westcon Africa Middle East acquired a 51%    
interest in the Sparnoon-Dynatech Group, an established African ICT distributor.
On 1 October 2007, the Group`s Logicalis subsidiary acquired the 20%            
shareholding in its South American businesses which it did not already own.     
Logicalis also acquired a further 50% of Intact Integrated Services GmbH, its IT
services operation in Germany on 1 October 2007 to take its holding in that     
business to 75%.  As part of the consideration for these two transactions, 0.6  
million Datatec shares were issued.                                             
On 2 October 2007 Westcon Group, Inc. acquired the assets of Cernet of America, 
Inc. and its related Mexican company, Cernet Tecnologia en Telecomunicaciones,  
S.A. de C.V.                                                                    
9    CURRENT TRADING AND PROSPECTS                                              
Datatec has continued to see strong demand for ICT products and services in all 
of its major markets despite the US economy being subdued.  The growth trend    
established by the Group during the last few years remains encouraging, as do   
the fundamentals of its addressable markets around the world.  The weaker dollar
has provided support for investment in technology solutions globally which are  
mainly denominated in the US currency.                                          
Westcon is expected to continue to show good growth in the second half of the   
year, driven organically and from the recent acquisitions which are being       
successfully integrated.  Logicalis has taken the necessary actions to improve  
the EBITDA contribution of its US operations and should see good improvement in 
the second half of the financial year.  Analysys Mason expects to see an        
increase in both revenues and profitability in the second half of the financial 
year.                                                                           
Current trading remains satisfactory and in line with the Board`s expectations  
for a stronger second half in comparison with the first half of the year.       
On behalf of the Board:                                                         
L Boyd         J P Montanana            D B Pfaff                               
Chairman       Chief Executive Officer  Group Finance Director                  
25 October 2007                                                                 
CONDENSED GROUP INCOME STATEMENT                                                
                                            Restated                            
                               Unaudited    Unaudited   Audited                 
six months   six months  year ended              
                               to           to                                  
US$ 000`s                       31 Aug 07    31 Aug 06   28-Feb-07              
Revenue                         1,921,704    1,520,270   3,167,772              
Continuing operations           1,776,978    1,497,293   3,075,344              
Acquisitions                     144,726      22,977      92,428                
Cost of sales                   (1,673,876)  (1,329,377) (2,752,601)            
Gross margin                    247,828      190,893     415,171                
Operating costs                 (186,842)    (142,444)   (302,129)              
Unrealised foreign exchange     (536)        3,537       6,314                  
(losses) / gains                                                                
Operating profit before finance 60,450       51,986      119,356                
costs, depreciation and                                                         
amortisation ("EBITDA")                                                         
Depreciation                    (7,470)      (7,051)     (13,676)               
Amortisation related to         (4,460)      (1,676)     (5,396)                
intangible assets                                                               
Operating profit before          48,520       43,259      100,284               
goodwill adjustment                                                             
Goodwill adjustment              -            -           (1,142)               
Operating profit                48,520       43,259      99,142                 
Interest received               5,311        6,071       9,641                  
Financing costs                 (13,360)     (10,833)    (19,295)               
Loss on disposal of investments 0            0           (55)                   
Profit before taxation          40,471       38,497      89,433                 
Taxation                         (12,122)     (15,014)   (27,305)               
Profit for the period from      28,349       23,483      62,128                 
continuing operations                                                           
Profit for the period from       -            34         24                     
discontinued operations                                                         
Profit for the period           28,349       23,517      62,152                 
Attributable to:                                                                
Minority interests              905          659         2,103                  
Equity holders of the parent    27,444       22,858      60,049                 
                               28,349       23,517      62,152                  
                                                                                
Number of shares (millions)                                                     
 Issued                        169          147         155                     
 Weighted average              163          147         150                     
 Diluted weighted average      166          150         153                     

Earnings per share (US cents)                                                   
 Basic EPS                     16.8         15.6        40.0                    
 Diluted basic EPS             16.5         15.2        39.2                    

SALIENT FINANCIAL FEATURES                                                      
                                                                                
Headline earnings               27,368       22,936      61,226                 

Headline earnings per share (US                                                 
cents)                                                                          
 Headline                      16.8         15.6        40.8                    
Diluted headline              16.5         15.2        40.0                    
                                                                                
Underlying earnings             30,857       20,473      58,860                 
                                                                                
Underlying earnings per share                                                   
(US cents)                                                                      
 Underlying                    18.9         14.0        39.2                    
 Diluted Underlying            18.6         13.6        38.5                    

Net asset value per share (US   362.2        322.4       346.9                  
cents)                                                                          
Net tangible asset value per    172.1        209.2       219.6                  
share (cents)                                                                   
Cash generation / (utilisation) 1.6          (7.2)       12.9                   
per share (US cents)                                                            
                                                                                
KEY RATIOS                                                                      
                                                                                
Gross margin %                   12.9         12.6        13.1                  
EBITDA on ongoing operations %   3.1          3.4         3.8                   
Effective tax rate %             30.0         39.0        30.5                  
                                                                                
Exchange Rates                                                                  
Average Rand / US$ exchange      7.1:1        6.7:1       7.0:1                 
rate                                                                            
Closing Rand / US$ exchange      7.2:1        7.1:1       7.2:1                 
rate                                                                            
                                                                                

CONDENSED GROUP BALANCE SHEET                                                   
                               Unaudited    Unaudited   Audited                 
US$ 000`s                       31 Aug 07    31 Aug 06   28-Feb-07              

ASSETS                                                                          
                                                                                
Non-current assets               372,582      211,660     242,096               
Property, plant and equipment   28,506       22,019      22,307                 
Capitalised development         13,951       11,229      14,068                 
expenditure                                                                     
Goodwill                        251,111      140,536     162,586                
Other intangible assets         56,406       14,732      20,720                 
Investments                     2,865        0            0                     
Deferred tax assets             19,743       23,144      22,415                 
                                                                                
Current assets                  1,290,099    1,041,837   1,149,138              
Inventories                     290,359      225,337     268,944                
Receivables                     784,335      575,367     656,587                
Cash and cash equivalents       215,405      241,133     223,607                

Total assets                     1,662,681    1,253,497   1,391,234             
                                                                                
EQUITY AND LIABILITIES                                                          

Ordinary shareholders` funds    612,359      474,112     537,744                
Minorities` interest            16,104       13,978      14,852                 
Total equity                    628,463      488,090     552,596                
Long-term liabilities           59,537       45,171      50,176                 
Deferred tax liabilities        7,064        10,122      13,232                 
                                                                                
Current liabilities             967,617      710,114     775,230                
Payables and provisions         758,792      577,698     674,095                
Amounts owing to vendors        3,294        3,884       4,044                  
Taxation                        12,712       10,718      14,876                 
Bank overdrafts                 192,819      117,814     82,215                 

Total equity and liabilities    1,662,681    1,253,497   1,391,234              
                                                                                
Capital expenditure incurred in 7,477        6,641        10,633                
current period                                                                  
Capital commitments at end of   4,651        2,107        11,878                
period                                                                          
Lease commitments at end of     112,644      104,753      108,039               
period                                                                          
 Payable within one year       21,614       13,624       17,871                 
 Payable after one year        91,030       91,129       90,168                 
                                                                                

CONDENSED GROUP CASH FLOW STATEMENT                                             
                                                                                
                               Unaudited    Unaudited   Audited                 
six months   six months  year ended              
                               to           to                                  
US$ 000`s                       31 Aug 07    31 Aug 06   28-Feb-07              
                                                                                
EBITDA                          60,450       51,986      119,356                
(Profit) / loss on disposal of  (106)        112         6                      
property, plant and equipment                                                   
Non-cash items                  658          20          2,629                  
Cash generated before working    61,002       52,118      121,991               
capital changes                                                                 
Working capital changes          (58,257)     (62,712)    (101,924)             
Decrease / (increase) in        7,954        (7,614)     (58,984)               
inventories                                                                     
Increase in receivables         (2,034)      (62,927)    (121,289)              
(Decrease ) / increase in       (64,177)     7,829       78,349                 
payables                                                                        

Cash generated from / (utilised 2,745        (10,594)    20,067                 
in) operations                                                                  
Net finance costs paid          (8,049)      (4,762)     (9,654)                
Taxation paid                   (16,580)     (7,671)     (14,039)               
Net cash outflow from operating (21,884)     (23,027)    (3,626)                
activities                                                                      
                                                                                
Net cash outflow from investing (160,915)    (28,275)    (60,303)               
activities                                                                      
Net cash outflow from disposal   -            -          (31)                   
of operations and investments                                                   

Net cash inflow from financing  76,124       4,024       31,485                 
activities                                                                      
Capital distribution to         (16,775)     (6,185)     (6,589)                
shareholders                                                                    
                                                                                
Decrease in cash and cash       (123,450)    (53,463)    (39,064)               
equivalents                                                                     
Translation difference on       4,645        4,531       8,205                  
opening cash position                                                           
Cash and cash equivalents at    141,392      172,251     172,251                
beginning of period                                                             
Cash and cash equivalents at    22,587       123,319     141,392                
end of period (*)                                                               
                                                                                
(*) Comprises cash resources, net of bank                                       
overdrafts and trade finance advances.                                          
                                                                                
SEGMENTAL ANALYSIS                                                              
                                            Restated                            
Unaudited    Unaudited   Audited                 
                               six months   six months  year ended              
                               to           to                                  
US$ 000`s                       31 Aug 07    31 Aug 06   28-Feb-07              

Revenue                                                                         
                                                                                
Westcon                         1,385,224    1,129,045   2,271,557              
Logicalis                       395,505      308,376     693,113                
Analysys Mason                  31,451       30,699      61,352                 
Other Holdings                  109,524      52,150      141,750                
Revenue from ongoing operations 1,921,704    1,520,270   3,167,772              

EBITDA                                                                          
                                                                                
Westcon                         47,660       37,951      82,671                 
Logicalis                       8,117        11,842      26,795                 
Analysys Mason                  3,027        3,227       6,202                  
Other Holdings                  1,646        (1,034)     3,688                  
EBITDA from ongoing operations  60,450       51,986      119,356                

Operating profit before                                                         
goodwill adjustment                                                             
                                                                                
Westcon                         41,207       32,923      72,504                 
Logicalis                       3,284        8,550       18,783                 
Analysys Mason                  2,719        3,050       5,752                  
Other Holdings                  1,310        (1,264)     3,245                  
Operating profit from ongoing   48,520       43,259      100,284                
operations                                                                      
                                                                                
Total assets                                                                    

Westcon                         1,133,779    864,257     873,966                
Logicalis                       343,990      294,147     343,189                
Analysys Mason                  51,809       54,324      42,518                 
Other Holdings                  133,103      40,769      131,561                
                               1,662,681    1,253,497   1,391,234               
                                                                                
                                                                                
DETERMINATION OF HEADLINE EARNINGS                                              
                                                                                
Equity holders of the parent    27,444       22,858      60,049                 
per the income statement                                                        

Headline earnings adjustments:  (106)        78          1,179                  
Goodwill adjustment              -            -          1,142                  
(Profit) / loss on disposal of   (106)        112        6                      
plant and equipment                                                             
(Profit) / loss on disposal and -            (34)        31                     
closure of discontinued                                                         
operations                                                                      
Tax effect                    32           -           (2)                    
  Minorities` interest          (2)          -           -                      
                                                                                
Headline earnings               27,368       22,936      61,226                 

DETERMINATION OF UNDERLYING EARNINGS                                            
                                                                                
Headline earnings               27,368       22,936      61,226                 

Underlying earnings             4,996        (1,861)     (918)                  
adjustments:                                                                    
Unrealised foreign exchange      536          (3,537)     (6,314)               
losses / (gains)                                                                
Amortisation of intangible       4,460        1,676       5,396                 
assets                                                                          
  Tax effect                    (1,502)      (560)       (1,607)                
Minorities` interest          (5)          (42)        159                    
                                                                                
Underlying earnings             30,857       20,473      58,860                 
                                                                                
CONDENSED STATEMENT OF CHANGES IN TOTAL EQUITY                                  
                                                                                
Balance at beginning of period  552,596      461,351     461,351                
Translation of foreign          (551)        (8,533)     (4,290)                
subsidiaries                                                                    
Translation difference on       1,481        7,825       8,758                  
equity loans                                                                    
Prior year adjustment           1,132        -           -                      
Recognised directly in equity   2,062        (708)       4,468                  
Attributable profit for period  27,444       22,858      60,049                 
Total income recognised for the 29,506       22,150      64,517                 
period                                                                          
Shares issued                   61,225       8,303       26,830                 
Capital distribution to         (16,775)     (6,185)     (6,589)                
shareholders                                                                    
Share-based payments            659          998         1,375                  
Acquisitions / disposals        -            -           2,765                  
Minority interests              1,252        1,473       2,347                  
Balance at end of period        628,463      488,090     552,596                
25 October 2007                                                                 
Date: 25/10/2007 08:00:05 Produced by the JSE SENS Department.                  
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